Monterey County seeks court ruling on desal ownership ordinance

Monterey County will test in court whether its ordinance requiring desalination plants to be owned by public entities applies to California American Water.

On Tuesday, County Counsel Charles McKee said the Board of Supervisors authorized him to initiate litigation against Cal Am seeking declaratory relief on the county's desal ordinance after the company threatened to sue. McKee said the county hasn't decided where to file the litigation.

Cal Am and the state Public Utilities Commission have argued the ordinance doesn't apply to the company because it is regulated by the state agency. Cal Am is pursuing a company-owned desal plant as part of its Monterey Peninsula Water Supply Project, which is aimed at providing a replacement source of water before a state-ordered cutback in pumping from the Carmel River takes full effect at the start of 2017.

Last week, a San Francisco law firm representing Cal Am sent a letter to McKee's office asserting the county ordinance doesn't apply to Cal Am because it is exempt as a public water system, and that it "will continue to be a major obstacle to (the company's) ability to move forward" with its water supply project.

The letter asked the supervisors to decide by Tuesday that the ordinance does not apply to Cal Am's project. If not, the letter said, the company would sue.

McKee said the county's main interest in the ordinance is as a tool for protecting public health and safety by ensuring any desal plant owner has the technical and financial capacity to operate such a facility.

A PUC administrative law judge has asked all parties to the water supply proceeding to prepare briefs on a number of key legal issues, including the county's ordinance.

As a result, McKee said, the "time is ripe for the courts to decide" the issue.

Supervisor Dave Potter, the board chairman, indicated the supervisors believe the ordinance is worth defending and said the Cal Am challenge is the "test case" for the ordinance.

"The Board of Supervisors believes public health and safety is served well by this ordinance because it requires desalination operators to meet stringent health standards as well as assuring operators have the technical, managerial and financial capacity to maintain a high-quality operation," he said. "Good public policy dictates that the county protect public safety."

Supervisor Jane Parker said the board believes seeking a court ruling on the ordinance is the quickest way to resolve the issue, noting the board discussed a confidential communication from Cal Am last week indicating the company was considering legal action. She said the board decided that considering changes to the ordinance would likely draw litigation as well.

"The county's really trying to respect Cal Am's desire to get everything lined up (for the water project)," she said.

Parker said she believes the ordinance has been effective in controlling ownership of desal facilities, and the board is primarily interested in preserving as much of the ordinance as possible.

A statement issued Tuesday said the county "wants a solution to water supply as quickly as possible but only with the protection of health and safety."

Also Tuesday, the board decided unanimously to pursue rezoning the former Whispering Oaks business park site on Fort Ord as open space and adopted its 2012-13 budget.